The Benefits of Mortgage Planning

The Benefits of Mortgage Planning 

Applying for a mortgage can be a daunting task, especially for first-time homebuyers. The process involves multiple steps, and making mistakes can lead to delays, rejection, or even financial losses. 

At MSF Lending Inc, our certified mortgage experts are dedicated to helping you navigate the mortgage application process smoothly. In this article, we will guide you through the common mistakes to avoid when applying for a mortgage, ensuring you’re well-prepared for this significant financial decision.


 

Concern #1: Not Checking Your Credit Score 

Your credit score plays a pivotal role in determining your mortgage eligibility and the interest rate you receive. A robust credit score can secure better interest rates, while a poor score may lead to higher rates or outright rejection. Generally, a credit score of 700 or higher is deemed favorable, although this benchmark can vary by lender. 

How to Check Your Credit Score: 

  • Utilize platforms like Credit Karma, Credit Sesame, or Experian for free credit score checks. 
  • Scrutinize your credit report for accuracy and current information. 
  • Look to promptly understand and correct any errors or inaccuracies with the credit bureau. 

The Impact of Credit Score on Mortgage: 

  • A high credit score can help you qualify for lower interest rates, potentially saving thousands over the loan’s duration. 
  • A low credit score may result in higher interest rates, increasing monthly mortgage payments. 

Consult with MSF Lending Inc to understand how your credit score influences your mortgage application. 

Concern #2: Not Gathering Required Documents 

Not providing all the necessary documents can delay your mortgage application. Make sure you have all the required documents, including: 

  • Income Proof: 
  • Pay stubs (recent 30 days) 
  • W-2 forms (previous two years) 
  • Tax returns (previous two years) 
  • Bank Statements: 
  • Recent 60 days’ statements for all bank accounts 
  • Other Assets like: Retirement Plan, Life Insurance, Mutual Funds/Stocks 
  • Identification: 
  • Driver’s license 
  • Passport 
  • Proof of Insurance: 
  • Home insurance policy 
  • Flood Insurance (if applicable) 

Additional Documents for Self-Employed Borrowers: 

  • Business tax returns (previous two years) 
  • Profit and loss statements (current year) 
  • Balance sheet (current year)


     

Concern #3: Shopping Around for the Best Interest Rate 

Different lenders offer different financing terms and interest rates, and not shopping around can cost you thousands of dollars over the life of the loan. Research and compare interest rates from various lenders to find the best deal. 

How to Shop for the Best Interest Rate: 

  • Research online for lenders offering competitive interest rates. 
  • Compare rates from different lenders, including banks, credit unions, and mortgage brokers. 
  • Consider working with a mortgage broker who can help you compare rates from multiple lenders. 

The Impact of Interest Rate on Mortgage: 

  • A lower interest rate can save you thousands of dollars over the life of the loan. 
  • A higher interest rate can increase your monthly mortgage payments. 

Talk to our Certified Mortgage Experts to learn more about how to get the best interest rate. 

Concern #4: Considering Additional Costs 

In addition to your monthly mortgage payment, there are other costs associated with homeownership, such as: 

  • Property Taxes: 
  • Vary by location and property value 
  • Insurance: 
  • Home insurance 
  • Flood insurance (if applicable) 
  • Maintenance Costs: 
  • Repairs and renovations 
  • Property maintenance 

How to Calculate Additional Costs: 

  • Consider properties in Counties that have lower property taxes in your area. 
  • Get insurance quotes from different providers. 
  • Consider setting aside 1-3% of your home’s value for annual maintenance costs.



     

Concern #5: Get your Mortgage Loan Pre-Approved 

Getting pre-approved for a mortgage before starting your home search can give you a sense of security that you can afford the property of interest, as well as help you secure a Ratified Contract, since Sellers will expect a Pre-Approval to consider your Offers..


 

How to Get Pre-Approved: 

  • Click HERE to apply for a Mortgage Loan 
  • Provide required documents, including income proof, bank statements, and identification. 
  • Receive an estimate of how much you can borrow, as well as the terms of financing.

     

Concern #6: Considering Additional Costs 

In addition to your monthly mortgage payment, there are other costs associated with homeownership, such as: 

  • Property taxes: These can vary depending on the location and value of the property. 
  • Insurance: This includes homeowner’s insurance and potentially flood insurance or other specialized coverage. 
  • Maintenance costs: As a homeowner, you’ll be responsible for maintenance and repairs, which can increase over time.

     

Reach out to connect with our highly qualifies Mortgage Advisors 

Our Certified Mortgage Advisor are here to guide you through the mortgage process and help you focus on the best outcome. 

Contact us today to see all the Programs that we can help you and your Family with to your new home. 

Feel free to schedule a call with one of our Certified Mortgage Advisors and discuss your options and get personalized advice.